New York Life’s 2014 Net Income Jumps 23% as CEO Notes Low Life Insurance Growth Nationally
April 9, 2015 by Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com
NEW YORK – New York Life Insurance Co.’s full-year 2014 profit increased amid low growth in the life insurance industry nationally, according to its chief executive officer.
Consolidated GAAP net income for New York Life jumped 23% to $2.22 billion, driven by higher net investments gains and management fees, a spokesperson said.
The company recorded a 14.7% increase in operating earnings in 2014 to $2.02 billion. “Despite continued low interest rates, competition from a strong stock market, and low growth in the life insurance market nationally, New York Life exceeded $2 billion in earnings for the first time and reached a new high in surplus and asset valuation reserve, a key measure of our financial strength,” Ted Mathas, chairman and chief executive officer, said in a statement.
Surplus and asset valuation reserve grew by $796 million to $21.9 billion. Assets under management increased to $541 billion in 2014.
Individual life insurance in force rose to $871 billion, which is $31 billion more than 2013, the company said. New York Life’s insurance and agency group includes the company’s life insurance business in the United States and its career agency system of 12,000 licensed agents across the United States.
It also has two supplemental distribution channels for the U.S. life business. One is the direct response business, which is a direct marketer of life insurance through an endorsed program with AARP geared to its membership.
Policyholder benefits and dividends paid last year rose 5% to $9.08 billion. This year, the dividends being paid to its participating policyholders grew more than 9%.
“Since 2011 we have increased the dividend payout by 30%, far exceeding the three-year growth of our large mutual company peers,” Mathas said.
Citing Limra as the source, New York Life said it continued to lead the industry in guaranteed lifetime income, with a 22% market share in fixed immediate annuities and 42% of the market for deferred income annuities.
New York Life Investments sells retail mutual funds through its MainStay Funds. Its investments group reported sales these mutual funds of $25.9 billion in 2014 through the third-party market and New York Life agents.
In December, New York Life’s third-party global asset-management business said it planned to enter the exchange-traded fund industry as it agreed to acquire IndexIQ, which is involved in the liquid alternative ETF sector. The transaction, expected to close in the first half of this year, will combine New York Life Investment Management’s franchise and distribution platform with IndexIQ’s ability to launch alternative ETF products (Best’s News Service, Dec. 5, 2014).
The deal will add $1.5 billion to MainStay’s assets under management and provide the ability to serve investors seeking exposure to alternative investments through ETFs.
New York Life said it hired 3,680 full-time agents last year, with 52% of its new hires in the field being individuals who represent the cultural markets.
New York Life Group is the sixth-largest U.S. life insurer based on 2013 total admitted assets of $252.52 billion, according to A.M. Best Co. New York Life is the largest mutual life insurer in the United States.
Also in December, John Hancock Financial, the U.S. division of Canada’s Manulife Financial Corp., said it would acquire the retirement plan services business of New York Life. The move will boost John Hancock’s expansion in the mid-case and large-case retirement plan markets, and increase plan assets under administration by 60% to $135 billion (Best’s News Service, Dec. 23, 2014).
New York Life Insurance Co. and New York Life Insurance and Annuity Corp. each currently has a Best’s Financial Strength Rating of A++ (Superior).
